More than 41 million people visit Las Vegas, Nevada each year. It’s a haven for foodies, theatergoers, and risk-takers. Beyond the bright lights and diverse attractions, Vegas is a robust ecosystem for cannabis businesses. It’s tax-friendly, a vibrant tourist hub, and well-regulated to benefit cannabis entrepreneurs.
Nevada voters passed the Regulation and Taxation of Marijuana Act in 2016. It legalized the purchase, possession, and consumption of adult-use cannabis for people 21 and older.
While the “Entertainment Capital of the World” has always attracted tourists, it’s now a mecca for cannatourism. In the six years since legalization, Nevada entrepreneurs have been busy establishing some of the most unique and alluring cannabis dispensaries in the country.
Their efforts have not gone unnoticed by cannabis enthusiasts. Cannabis sales totaled just under $1 billion in the 2022 fiscal year, according to the state Cannabis Compliance Board. Most of that revenue came from Clark County (where Las Vegas resides), which generated $754,357,922 in sales.
Nevada charges a 10% excise tax on recreational cannabis sales, all of which is earmarked for education funding. For business owners, Nevada is a tax-friendly state. It has no personal income tax, franchise tax, unitary tax, inventory tax, inheritance tax, or estate tax.
The Las Vegas Global Economic Alliance also offers a free operating cost comparison so entrepreneurs can compare Vegas with other U.S. metropolitan regions.
Of the 102 licensed dispensaries in Nevada in 2022, 57 are in Las Vegas and Clark County. While it’s a competitive landscape, there are plenty of compelling reasons to do business in The Silver State.
The U.S. Bureau of Labor Statistics reported it’s the top state in America for job growth. Further, the Las Vegas Global Economic Alliance noted it consistently ranks as one of the nation’s highest in growth and investment.
In this Tech Zone, we’ll explore the innovators and industries making Nevada one of the hottest cannabis hubs in the Western U.S.
Safe Plants, Healthy Customers
One benefit of cannabis legalization is consumer confidence and safety. It was one of the main arguments for adult-use legalization. In Nevada, medical cannabis testing covers a range of contaminants and heavy metals, as well as THC and cannabinoid potency.
Despite high demand, there are only 10 licensed cannabis testing laboratories statewide. Those few are serving a record number of clients.
While many labs are only recently established, others have decades of experience to support their reputations.
Taylor Coomer, Plant Safe LLC director of operations, said Plant Safe’s experience helped them quickly adapt to the needs of the cannabis sector.
“A lot of the protocols utilized in the cannabis analytical space are similar to testing protocols used in other industries, such as the pharmaceutical and food science industries,” Coomer said.
“It’s less reinventing the wheel and more taking something that exists and adapting it for cannabis.”
With so few labs operating in the state, operators are under increasing pressure to find reputable partners.
It’s an issue that has become more important as several Nevada labs have lost their business licenses due to unscrupulous practices.
Alec Garcia, a managing partner of 374 Labs in Nevada, told the Reno Gazette Journal his lab is suffering because “people are looking for a competitive advantage.”
His clients compare results from 374 Labs with others whose analyses are more appealing, albeit false.
Lindsay Wagner, Plant Safe’s director of systems and analytics, explained why finding a lab partner with ethical standards is essential.
“Whoever our partner is, whether it’s a patient, researcher, or grower, they feel like they’ll succeed because Plant Safe is supporting their business through science, consistency, and accurate reporting,” Wagner said.
Plant Safe’s background in medical testing helped it adapt to the pace of cannabis testing. During the COVID-19 pandemic, Plant Safe responded to unprecedented demand for rapid testing.
The company needed duplicate equipment to keep pace and protect its bottom line when machinery needed repair. Wagner said it’s a valuable lesson for the cannabis industry as well.
“We have a robust redundancy of equipment, which is something that’s unique in this space, but it’s something that spawned from the lessons we learned during the height of the COVID-19 crisis.”
Candice Leger, Plant Safe VP of business development, said experienced staff is another indicator of a quality lab partner. “To back the redundancy of instrumentation, we also have the knowledge base. The majority of the lab techs and supporting staff have backgrounds in the cannabis industry.”
Experience, ample equipment, and a collaborative attitude can make all the difference in separating a poor-quality laboratory from a top-tier facility. Many Nevada cannabis companies are discovering when a laboratory fails, its clients fail — and consumers pay the price.
Automating Production for Nevada Cannabis Companies
The Silver State is home to more than 100 cannabis production facilities and over 100 dispensaries. The top sellers for these businesses are vapes and pre-rolls, particularly in tourist destinations like Las Vegas.
Data company Headset reported that pre-roll sales have increased by 38.9% since 2020. Pre-rolls tend to have a high profit margin for retailers and are popular with customers.
They are portable, discrete, and accessible for everyone, from the connoisseur to the novice. Plus, they don’t require any special equipment to smoke, which means there’s nothing to dispose of before entering an airport or traveling across state lines.
As demand ramps up, more companies are opting for automated solutions. Automation provides consistent results 24 hours a day, without pulling from a company’s labor pool.
PreRoll-Er, an automation company with locations in Canada and Las Vegas, NV, offers seven pre-roll machines to suit big or small producers.
The company allows its clients to start modestly with the PreRoll-Er 100 and grow up to the 800 model without losing their initial investment.
Options range from 500 to 4,800 pre-rolls an hour. PreRoll-Er’s machines also feature an optional direct-oil injection system for infused products.
The company chose Las Vegas as its American base of operations because it’s central to some of the largest cannabis markets in the country.
“First of all, who doesn’t like to go to Vegas? And it’s central because California is the biggest market right now, but surrounding states have [legalized] too, so to be right in the middle is ideal,” PreRoll-Er Marketing Coordinator Patrick Grenier told Cannabis & Tech Today.
“Traveling is easier from Vegas, too, because there are flights everywhere,” he added.
Flower remains the most popular cannabis product in America, another reason pre-rolls have an edge. While cannabis flower tends to have 18-30% THC potency, pre-rolls can be infused with concentrates such as oil, caviar, diamonds, or other forms of concentrated cannabis.
The resulting infused pre-rolls can have THC potency of up to 50%. This allows customers to reach the potency levels they want while still consuming their preferred product — flower.
PreRoll-Er designed its products for versatility, offering regular pre-rolls and infused options in one machine. The company’s innovative designs helped it win the “Best Packaging Equipment” award at the O’Cannabiz Industry Awards Gala in 2022.
Nevada is home to some of the country’s top cannabis dispensaries. With millions of visitors pouring into the state each year, it’s quickly becoming one of the cannabis industry’s most innovative technology centers. Grenier offered these words of caution, noting the temptation to put style over substance is strong in Sin City.
“You’re spending so much money on packaging and marketing that you forget the most important thing, which is when you sell a pre-roll, that’s the last thing the customer is going to take from your company. If you do a bad job, you can forget about repeat business — and repeat business is the name of the game.”
A Cure for Customer Retention
Cannabis cultivation is often a process of delayed gratification. After months of growing, cultivators spend weeks drying and curing crops to create beautiful, shelf-worthy flower. The drying process can be tedious and laden with risks.
Nugs that have lost too much moisture (an easy feat in Nevada’s climate) offer a less desirable smoke and sell for less at the retailer.
If the humidity in the drying room is too high, mildew quickly settles into the product. Whether its valuable real estate lost to drying or burdensome HVAC expenses, crafting the perfect crop doesn’t stop at harvest.
When flower is ready for testing, Nevada regulations allow only 15% moisture content. Loss of terpenes and flavonoids are some of the first noticeable signs the flower hasn’t been properly dried.
Improperly cured buds smell less fragrant, taste less flavorful, and ultimately have fewer effects than well-cured flower.
Cryo Cure CEO Tracee McAfee told Cannabis & Tech Today the preservation process can dramatically alter a plant’s chemical profile.
McAfee and her business partner, President and Chief Cultivation Officer Greg Baughman, created a patented technology that dries and cures flower in less than 24 hours from the time of harvest.
While based in freeze drying technology, Cryo Cure is distinct from conventional freeze drying. Where conventional methods leave trichomes brittle and the flower too fragile to handle, Cryo Cure locks in moisture content between 6% and 12%, depending on the cultivar’s needs — just enough to benefit from freeze drying without negatively affecting flower quality.
“Commercial freeze dryers don’t preserve the terpene and moisture content like our proprietary technology can,” noted McAfee. She describes Cryo Cured cannabis as “live resin flower.” While freezing flower for live resin extraction isn’t new, smokable flower in this state is garnering more attention.
As cannabis markets mature, so does the customer base. People who once asked for high-potency strains begin to shift into more sophisticated buying patterns.
MJBizDaily spoke with Ann DeMarco, a Colorado-based retailer, to find out what her customers are asking for. “We have an awful lot of consumers who ask for specific terpene profiles to help them achieve certain outcomes, such as something to help them sleep, something that will help with pain, something that will help relieve migraines,” DeMarco said.
While many of Nevada’s visitors are tourists from states yet to legalize cannabis, the whole country is becoming more familiar with the plant. Medical cannabis is now legal in 32 states.
Retailers are dealing with the most educated customers in cannabis history. Many are seeking relief from medical issues while hoping to avoid pharmaceutical pain relievers.
“We’re able to preserve so many of the terpenes that naturally burn off when [flower] is hanging there to dry,” McAfee noted. “We’re getting a terpene called carene; it’s a fragile terpene that normally dissipates just in the air. Well, we’ve suspended that with our Cryo Cure process. So now you can get the bone healing and anti-inflammatory properties it offers,” she added.
Whether customers are seeking medical relief or tasty terpenes, the solution to repeat business is in the cure.
This article first appeared in Volume 4 Issue 3 of Cannabis & Tech Today. Read the full issue here.